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IAMGOLD Reports Q1 Results - Beats Cost Guidance

Tuesday, May 7, 2013 5:05 PM

All monetary amounts are expressed in U.S. dollars, unless otherwise
indicated.Refer to the interim Management Discussion and Analysis (MD&A) and
unaudited consolidated Financial Statements for more information.

TSX: IMG NYSE: IAG

TORONTO, May 7, 2013 /CNW/ - IAMGOLD Corporation ("IAMGOLD" or the "Company") today reported its unaudited consolidated
financial and operating results for the first quarter ending March 31,
2013.

Attributable gold production of 188,000 ounces, with attributable sales
of 171,000 ounces.

"With the initiation of our $100 million cost reduction program before
the drop in gold prices and our history of disciplined capital
allocation, IAMGOLD was well ahead of the curve in responding to the
challenges in our industry," said Steve Letwin, President and CEO. "We
are very encouraged with cash costs coming in at $787 an ounce, $63
below the bottom of our guidance, and we will revisit our cost guidance
in the second quarter. At the same time, our continued focus on
maintaining a strong balance sheet gives us the option of deferring
capital expenditures apart from what is essential to sustaining the
current operations. We will move forward only with expansion and development projects that
meet our criteria for delivering attractive returns. The traction we are making on the cost front together with our renewed
commitment to capital discipline points to a positive outlook ahead.

"Meanwhile, we continue to execute on our business plan, and brought
Westwood into production as scheduled at the end of the first quarter,"
continued Mr. Letwin. "And in mid-April, the National Assembly of the
Government of Suriname unanimously approved the joint venture agreement
respecting future resource development and related power costs. The 50%
reduction in the power rate applicable to new concessions and future
expansions beyond the one currently under review will open a new
chapter for Rosebel. We continue to have dialogue with the government
with respect to power rates at the existing Rosebel operation."

FIRST QUARTER 2013 HIGHLIGHTS

Change in Accounting for Joint Venture Interests
As a result of the adoption of IFRS 11, Joint Arrangements, effective
January 1, 2013, IAMGOLD began accounting for its joint venture
interests, Sadiola (41%) and Yatela, (40%) using the equity method of
accounting instead of proportionate consolidation. We now report
earnings from these joint ventures in the consolidated statements of
earnings in one line as share of net earnings (losses) from associates
and joint ventures. Although there is no change to net earnings and
earnings per share, individual line items such as revenues, cost of
sales and income tax expense were affected by collapsing the impact of
Sadiola and Yatela to one line. As well, consolidated operating cash
flows and investing activities within the consolidated statements of
cash flows were impacted due to the difference in equity accounting as
compared to proportionate consolidation. We continue to present
operational information about our joint ventures, including cash costs
and gold production.

Financial Performance

Revenues for the first quarter 2013 were $305.3 million, down 14% from
the same prior year period. The decrease was mainly due to a lower
volume of gold sales ($39.1 million) and a lower realized gold price
($11.5 million). The reduction in sales volumes was primarily related
to lower production, as expected, from processing lower grades at
Essakane and timing differences between production and sales.

Cost of sales for the first quarter 2013 was $184.4 million, up 3% from
the same prior year period. The increase was due to higher than
expected operating costs mainly related to longer hauling distances at
Rosebel and the mining and processing of harder rock ($4.6 million) and
higher depreciation expense ($1.0 million).

Adjusted net earnings1 attributable to equity holders for the first quarter 2013 were $57.7
million ($0.15 per share1), down $33.9 million ($0.09 per share) or 37% from the same prior year
period.

Net earnings attributable to equity holders for the first quarter 2013
were $10.9 million ($0.03 per share), down from $119.2 million in the
first quarter 2012. The decrease was mainly related to lower revenues
and higher cost of sales ($54.4 million), higher impairment of
investments ($22.8 million), derivative losses ($17.6 million) and
higher foreign exchange losses ($12.7 million). The impairment of
investments includes an $18.6 million impairment charge for the
Company's equity investment in INV Metals Inc. ("ÌNV") as a result of a
significant decline in the market value of INV shares. Since IAMGOLD
has no ability to control the investment, it is not permitted to
utilize an alternate valuation method which may have otherwise found
the investment to have a market value in excess of its carrying amount.

Operating cash flow for the first quarter 2013 was $99.5 million, down
$49.7 million, or 33% from the same prior year period. The decrease was
mainly due to lower revenues ($48.8 million).

Operating cash flow before changes in working capital1 for the first quarter 2013 was $115.2 million ($0.31 per share1), down $65.6 million ($0.17 per share) or 36% from the same prior year
period.

Financial Position

Cash, cash equivalents and gold bullion (at market value) was $863.3
million at March 31, 2013, down $157.3 million from December 31, 2012.
The decrease was mainly due to capital expenditures related to mining
assets ($194.7 million) and the payment of dividends ($48.6 million),
partially offset by cash from operating activities ($99.5 million).

As at March 31, 2013, no funds were drawn against the Company's $750
million total unsecured revolving credit facilities.

Production, Cash Costs and Margins

Gold Operations

Attributable gold production, inclusive of the joint venture operations,
was 188,000 ounces in the first quarter 2013, down 19,000 ounces from
the same quarter 2012. Production was lower due to lower grades at
Essakane (15,000 ounces) and Sadiola (6,000 ounces) and lower
throughput at Rosebel (4,000 ounces), partially offset by increased
production at Yatela (3,000 ounces) and Mouska (3,000 ounces). With the
ramp-up of contribution from the Doyon division, we are on track to
meet our annual production guidance.

Attributable sales volume, inclusive of joint ventures operations, for
the first quarter 2013 was 171,000 ounces compared to attributable gold
production of 188,000 ounces. The difference was mainly related to
Rosebel (8,000 ounces), due in part to in-transit inventory related to
switching to a different refiner for carbon fines, and ramp-up of
processing at Mouska (5,000 ounces). The nominal amount of production
from Mouska at the end of March did not get sold.

Cash costs2 for the first quarter 2013, inclusive of joint venture operations, were
$787 an ounce compared to $679 an ounce in the same quarter 2012, but
$63 below the bottom of the 2013 guidance range. Cash costs for IAMGOLD
operated sites were $731 an ounce compared to $596 an ounce for the
first quarter 2012. As expected, the year-over-year increase was mainly
due to the impact of lower grades on production, higher power costs
associated with grinding and crushing harder rock and inflationary
pressures across all sites. Mine re-sequencing, mostly at Rosebel, to
access high grade ore and the proactive kick-off of our cost reduction
program helped to reduce costs. While we anticipate further benefits
from the cost reduction initiatives, we are maintaining our outlook on
cash costs and will re-visit guidance in the second quarter.

The gold margin2 in the first quarter 2013 was $844 an ounce, down 17% from the first
quarter 2012, reflecting a 16% increase in cash costs per ounce and a
lower average realized gold price of $1,631 an ounce compared to $1,702
an ounce in the same prior year period.

Niobium Operations

Niobium production for the first quarter was 1.2 million kilograms, up
9% from the same quarter 2012.

The operating margin2 was $16 per kilogram, unchanged from the same prior year period.

COST REDUCTION PROGRAM

In March, before the drop in the gold price, we announced a $100 million
cost-reduction program to counter the cost pressure from inflation and
the higher demand for power associated with increasing rock hardness at
Essakane and Rosebel. We have completed comprehensive cost reviews at
all operating and exploration sites and corporate offices to identify
specific areas to reduce costs. We plan to reduce costs at our
operations by $43 million, exploration expenditures by $40 million and
mine site and corporate general and administrative costs by
approximately $11 million and $6 million, respectively. Through a
combination of greater control over discretionary spending, the
prioritization of activities and measures to improve productivity we
are making good progress with this program. The following are some
examples:

Prioritization of brownfield and greenfield exploration projects,
leading to refocusing of objectives, and cuts to, or elimination of,
lower priority projects.

Hiring freezes at most operations, with exceptions only for critical
production roles.

Re-sequencing of mining to defer waste stripping and to improve ore
grades during 2013.

Discussions with key suppliers to reduce costs of consumables and
services as well as capital equipment.

Reduced reagent consumption and prices at Niobec and increased
productivity in the converter process thereby reducing unit production
costs.

Reduced corporate travel and revised travel policy.

Fuel and waste oil management program to reduce fuel consumption.

OPERATING HIGHLIGHTS AND CORPORATE DEVELOPMENTS

Westwood/Mouska
The refurbished plant commenced production at the end of the first
quarter 2013. The operation is initially processing stockpiled ore from
the Mouska mine. The stockpiled ore from 2012 and the ore mined from
Mouska in 2013 are expected to total approximately 60,000 commercial
ounces for the year. Production from the Westwood mine, estimated at
approximately 80,000 ounces for 2013, will ramp up throughout the year.
Commercial production is expected to begin in October 2013. Until then,
the contribution from ounces sold will be netted against capital
expenditures. In total, the Westwood plant is expected to produce
between 130,000 to 150,000 ounces in its first year of production.

Essakane Expansion
The plant expansion at Essakane, which began mid-2012 to accommodate an
increasing proportion of hard rock, is on plan and on time for
completion by the end of 2013. Ore grades in 2013 are expected to be
10%-15% lower than the life of mine average, mainly due to the
processing of lower-grade, softer ore that had been stockpiled in prior
years. As Essakane moves into harder rock, the higher grades will help
to mitigate the impact of the higher energy consumption required to
treat harder ore and improve grades in line with the life of mine
average. We are also focused on bringing in softer ore from the
Falagountou satellite resource, eight kilometres east of the main pit.
Site evaluation drilling is expected to commence in the second quarter
and we are looking at the possibility of advancing evaluation and
development studies with the objective of bringing the resource into
production in 2014, which would be a year ahead of the original mine
plan.

Sadiola Sulphide Project
With the exception of prior commitments, sustaining capital and
capitalized stripping, we are deferring capital expenditures with
respect to the sulphide expansion project until our joint venture
partner AngloGold Ashanti agrees to move forward. Regardless of
project economics, this is not a project that we will proceed with on
our own.

Côté Gold Project
The filing of the Project Description with the Canadian Environmental
Assessment Agency in March 2013 initiated the permitting process for
the Côté Gold Project in northern Ontario, which is expected to be
completed by the end of 2014. The pre-feasibility study is expected to
be completed by the end of 2013 followed by the completion of the
feasibility study at the end of 2014. If the project economics based on
the gold price environment at that time do not meet our required rate
of return, we have the option of deferring the project. Côté Gold is an
attractive long-term asset that will strengthen our production
pipeline.

Niobec Expansion
The completion of the feasibility study for the Niobec expansion is
expected in the third quarter 2013 followed by the finalization of the
permitting process in the second quarter 2014. As previously stated,
Niobec is a stable business that generates a predictable stream of cash
flow. Regardless of the project economics related to the expansion, we
will not move forward without a partner to jointly fund the project.

Rosebel Definitive Agreement
On April 13, 2013, the previously announced agreement with the
Surinamese government on November 26, 2012 was unanimously approved by
Suriname's National Assembly. This agreement provides the opportunity
to target softer rock at a significantly reduced power rate. The
agreement:

Extends the terms of the existing agreement by 15 years to 2042.

Establishes a joint venture with the Government of the Republic of
Suriname targeting an area within a 45-kilometre radius of the Rosebel
mill, but excluding the existing Rosebel concession. IAMGOLD will have
a 70% participating interest and the Government of Suriname a 30%
participating interest on a fully-paid basis for investment beyond the
scope of the current operation. The power rate applicable to all
production from the joint venture area will be $0.11 per kilowatt hour,
representing a 50% reduction from the current power rate.

We are pursuing further discussions with the Government of the Republic
of Suriname to reduce power rates applicable to our existing
concession. The feasibility study will not be finalized until the power
rate is determined.

Commitment to Zero Harm Continues

IAMGOLD made the 2013 Maclean's/Sustainalytics list of the 50 Most
Socially Responsible Corporations in Canada for the fourth year in a
row.

Regarding health and safety, the frequency of all types of serious
injuries (measured as DART rate3) for the first quarter 2013 was 0.96 compared to 1.12 for full year
2012, representing a 14% improvement.

SUMMARIZED FINANCIAL RESULTS

Financial Position ($ millions, except where noted)

March 31, 2013

Change

December 31, 20121

Cash, cash equivalents, and gold bullion

● at market value

$

863.3

(15%)

$

1,020.6

● at cost

$

744.9

(17%)

$

894.2

Total assets

$

5,282.5

-

$

5,295.6

Long-term debt

$

639.2

-

$

638.8

Available credit facilities

$

750.0

-

$

750.0

Summary of Financial and Operating Results

Three months ended
March 31,

($ millions, except where noted)

2013

Change

20121

Financial Data

Revenues

$

305.3

(14%)

$

354.1

Cost of sales

184.4

3%

178.8

Gross earnings from mining operations

$

120.9

(31%)

$

175.3

Net earnings attributable to equity holders of IAMGOLD2

$

10.9

(91%)

$

119.2

Basic net earnings per share ($/share)2

$

0.03

(91%)

$

0.32

Adjusted net earnings attributable to equity holders of IAMGOLD2

$

57.7

(37%)

$

91.6

Basic adjusted net earnings per share ($/share)2

$

0.15

(38%)

$

0.24

Operating cash flow2

$

99.5

(33%)

$

149.2

Operating cash flow ($/share)2

$

0.26

(35%)

$

0.40

Operating cash flow before changes in working capital2

$

115.2

(36%)

$

180.8

Operating cash flow before changes in working capital ($/share)2

$

0.31

(35%)

$

0.48

1

Balances related to 2012 have been reclassified as per note 2(c)(ii) of
the consolidated interim financial statements.

2

The Company has included the following non-GAAP measures: adjusted net
earnings attributable to equity holders of IAMGOLD, adjusted net
earnings per share, operating cash flow per share, operating cash flow
before changes in working capital per share. Refer to the Supplemental
Information attached to this news release for reconciliation to GAAP
measures.

KEY OPERATING STATISTICS

Three months ended
March 31,

2013

Change

2012

Key Operating Statistics - Gold mines

Gold sales - attributable (000s oz)

171

(12%)

195

Gold production - attributable (000s oz)

188

(9%)

207

Average realized gold price ($/oz)

$

1,631

(4%)

$

1,702

Total cash cost ($/oz)1

$

787

16%

$

679

Gold margin ($/oz)1

$

844

(17%)

$

1,023

Key Operating Statistics - Niobec Mine

Niobium production (millions of kg Nb)

1.2

9%

1.1

Niobium sales (millions of kg Nb)

1.2

-

1.2

Operating margin ($/kg Nb)1

$

16

-

$

16

1

The Company has disclosed the following non-GAAP measures: total cash
cost per ounce, gold margin per ounce, and operating margin per
kilogram of niobium sold at the Niobec mine. Refer to the Non-GAAP
performance measures section of this news release for reconciliation to
GAAP measures.

ATTRIBUTABLE GOLD PRODUCTION AND CASH COSTS

The table below presents the attributable gold production and total cash
cost per ounce of production to the Company.

Gold Production (000s oz)

Total Cash Cost (/oz)1

Three months ended
March 31,

Three months ended
March 31,

2013

2012

2013

2012

IAMGOLD Operator

Rosebel (95%)

89

93

$

717

$

637

Essakane (90%)

65

80

729

562

Doyon division2 (100%)

5

2

988

134

159

175

$

731

$

596

Joint Ventures

Sadiola (41%)

19

25

$

1,043

$

1,010

Yatela (40%)

10

7

1,196

1,613

29

32

$

1,094

$

1,135

Total

188

207

$

787

$

679

Cash cost, excluding royalties

$

699

$

588

Royalties

88

91

Total cash cost1

$

787

$

679

1

Total cash cost is a non-GAAP measure. Refer to the non-GAAP
performance measures section of this news release for the
reconciliations to GAAP measures.

2

In 2012, the Mouska mine, as planned, did not produce gold other than
marginal gold derived from the mill clean-up process. In 2013, the
processing plant at Westwood began milling Mouska stockpiled ore.

FIRST QUARTER 2013 OPERATIONS REVIEW

ROSEBEL MINE, SURINAME

Attributable gold production was 89,000 ounces for the first quarter
2013, 4% lower than the same quarter in 2012 due to lower throughput
partially offset by higher than expected grades and recoveries. The
mine was able to sequence its mining to access higher grade ore to
mitigate the increase in cash costs. Throughput was lower due to
unscheduled maintenance which resulted in the mill being shut down for
seven days, and a harder rock blend.

Total cash costs were $717 an ounce, 13% higher than the same period in
2012 mainly due to lower production, increased labour costs, higher
maintenance costs and higher fuel costs from longer hauls.

Cost management initiatives
Ongoing cost management initiatives at Rosebel include continuous
improvement programs to improve utilization of primary production
equipment in the mine, improve operator efficiency, optimize bench
sizes, improve drill and blast performance and, additionally, optimize
the intensive cyanide leach section of the gravity circuit to increase
overall recovery and reduce total cyanide consumption. The operation
continues to look for and implement opportunities to reduce manpower
requirements, to reduce power consumption and to find additional soft
rock resources to feed the plant.

ESSAKANE MINE, BURKINA FASO

Attributable gold production was 65,000 ounces, 19% lower than the same
prior year period as a result of expected lower grades. Essakane
continued stripping in Phase 2 of the push-back of the main pit. During
this period, higher-grader ore was stockpiled while lower-grade, softer
ore was mined and processed.

Total cash costs in the first quarter 2013 were $729 an ounce, up 30%
from the same prior year period. The increase was mainly due to the
impact of lower grades, higher energy prices and consumption and the
upward pressure on consumable prices.

Cost management initiatives
Ongoing cost management initiatives at Essakane include significantly
improved loading and hauling productivity in the mine, improved primary
crusher performance and a program to improve maintenance reliability in
the plant to maximize operating time and improve circuit stability. As
well, the construction team achieved early completion of two key
elements of the expansion project: additional leach capacity and a
pebble crusher for the existing grinding circuit. Commissioning and
integration of these two elements during April will enhance
performance, including improved efficiency of consumables. Manpower
growth at Essakane is being managed tightly, and filling of open
expatriate positions is being restricted. Efforts continue as well to
review alternative power sources for Essakane.

DOYON DIVISION, CANADA

The Doyon division includes the Mouska Mine and the Westwood Mine. The
Mouska Mine is scheduled to close at the end of 2013 and the Westwood
plant commenced production at the end of the first quarter 2013. The
Westwood plant is initially processing ore stockpiled from the Mouska
Mine, which is expected to total approximately 60,000 ounces in 2013.
The processing of ore from the Westwood Mine will ramp up throughout
2013, with production estimated at approximately 80,000 ounces for the
year. Commercial production is expected to begin in October 2013. Until
then, the contribution from ounces sold will be netted against capital
expenditures. In total, the Westwood plant is expected to produce
between 130,000 to 150,000 ounces in its first year of production.

With production commencing late in the quarter, production was nominal
and the small amount of gold poured was sold in April 2013.

Total cash costs per ounce were $988 an ounce, reflecting the nominal
amount of production in the first quarter.

Cost management initiatives
Initiatives at Westwood are focused on improving underground development
productivity. These efforts include greater involvement of senior
supervisors underground, improvements to the supply chain for work
materials to development crews, improved maintenance practices and
scheduling additional working faces to provide greater flexibility.
Improved underground development productivity will reduce requirements
for both additional manpower and equipment going forward, as well as
provide opportunities for increased production for the current year and
a quicker project ramp up period.

SADIOLA MINE, MALI

Attributable gold production for the first quarter of 2013 was 19,000
ounces, 24% lower than in the first quarter 2012 due to lower grades
partially offset by higher recovery.

Total cash costs were $1,043 an ounce, 3% higher than the same prior
year period mainly as a result of lower gold production. Royalties were
lower as a result of lower realized gold prices.

Sadiola did not distribute a dividend in the first quarter 2013 and
2012.

Cost management initiatives
Sadiola will address the effectiveness of contractor management so as to
improve mining efficiencies and mill performance to reduce costs and
increase gold production.

YATELA MINE, MALI

Attributable gold production for the first quarter 2013 was 10,000
ounces, 43% higher than in the first quarter 2012. The increase was due
to higher gold grades from the bottom of a satellite pit. Total
operating material mined was 45% lower than in the same prior year
period as the mine is approaching its end of life.

Total cash costs in the first quarter 2013 were $1,196 an ounce, down
26% from the same prior year period. This was due to higher gold
production and the impact of the impairment of inventories during 2012
which reduced the net cost of gold produced.

Yatela did not distribute a dividend in the first quarter 2013 and 2012.

Cost management initiatives
Yatela is focused on improving the production of gold through accessing
additional and/or higher grade ore zones as they are identified. During
the end of life mining, we will continue to look for opportunities to
leach additional gold from older heaps.

NIOBEC NIOBIUM MINE, CANADA

Niobium production in the first quarter 2013 of 1.2 million kilograms
increased 9% from the same period in 2012 due to higher Nb2O5 ore grades and throughput.

Niobium revenues increased to $49.7 million in the first quarter 2013
compared to $48.4 million in the same prior year period due to
marginally higher sales volume. The operating margin of $16 per
kilogram remained unchanged compared to the same period in 2012.

Cost management initiatives
For 2013, Niobec is focusing on improving underground development
productivity and blasting efficiency. Improved stability of ore quality
fed to the mill, together with enhanced flotation capacity, is
providing improved metallurgical performance. In the converter, the
operation has introduced larger melting vessels to improve overall
productivity and reduce costs.

ATTRIBUTABLE GOLD SALES VOLUME AND REALIZED GOLD PRICE

Average Realized Gold

Gold Sales1 (000s oz)

Price ($/oz)

Three months ended
March 31,

Three months ended
March 31,

2013

2012

2013

2012

IAMGOLD operator (100%)

155

178

$

1,630

$

1,704

Joint ventures2

28

30

$

1,638

$

1,690

Total1

183

208

$

1,631

$

1,702

1

Attributable sales volume for the first quarter 2013 and 2012 were
171,000 and 195,000 ounces, respectively, after taking into account 95%
of the Rosebel sales and 90% of the Essakane sales.

2

Attributable sales of joint ventures: Sadiola (41%) and Yatela (40%).

NIOBEC PRODUCTION, SALES AND OPERATING MARGIN

Three months ended March 31,

2013

Change

2012

Total operating material mined (000s t)

590

4%

570

Ore milled (000s t)

565

2%

555

Grade (% Nb2O5)

0.58

5%

0.55

Niobium production (millions of kg Nb)

1.2

9%

1.1

Niobium sales (millions of kg Nb)

1.2

-

1.2

Operating margin ($/kg Nb)1

$

16

-

$ 16

1

Operating margin per kilogram of niobium at the Niobec mine is a
non-GAAP measure. Refer to the Supplemental Information section
attached to this news release for reconciliation to GAAP measures.

CAPITAL EXPENDITURES

Capital expenditures (CAPEX) in the first quarter 2013 were $209.1
million, inclusive of joint ventures. The following table shows the
split between expansion-related CAPEX and sustaining CAPEX.

Rosebel
Total capital expenditures were $48.3 million in the first quarter.
Sustaining CAPEX was $36.0 million and included mining equipment ($18.9
million), capitalized stripping ($5.4 million), resource development
exploration ($3.2 million) and tailings dam ($3.1 million). Expansion
CAPEX of $12.3 million included mining equipment ($7.0 million), third
ball mill ($4.9 million) and the feasibility study ($0.4 million)
related to the future expansion.

Essakane
Total capital expenditures were $76.1 million in the first quarter.
Sustaining CAPEX of $30.5 million included capitalized stripping ($19.4
million) and mining equipment ($5.9 million). Expansion CAPEX of $45.6
million relates to the expansion of the plant (construction, mine and
mill equipment), which will be completed by the end of 2013, to
accommodate the transition to hard rock.

Westwood
Total capital expenditures were $51.9 million in the first quarter and
related to general mine infrastructure in preparation for start-up,
including the refurbishment of the mill.

Niobec
Total capital expenditures were $18.2 million in the first quarter.
Sustaining CAPEX was $8.4 million including underground development
($3.2 million) and mill optimization ($1.5 million). Although Niobec
will not move forward with an expansion without a partner to
participate in the funding, expansion CAPEX of $9.8 million included
the expansion feasibility study, land costs and mine development
associated with expansion and construction.

Joint Ventures
Total attributable capital expenditures were $14.4 million in the first
quarter. Sustaining CAPEX of $7.0 million included capitalized
stripping ($3.4 million) at Sadiola. While capital expenditures have,
for the most part, been deferred pending final approval by AngloGold
Ashanti to move the Sadiola sulphide project forward, expansion CAPEX
of $7.4 million related to previous commitments for equipment. There
were no significant capital expenditures at Yatela.

EXPLORATION

IAMGOLD was active at brownfield development and greenfield exploration
projects in eight countries located in West Africa and North and South
America for the three months ended March 31, 2013. In the first quarter
2013, exploration expenditures totaled $28.8 million, of which $22.1
million was expensed and $6.7 million was capitalized. This compares to
$27.7 million for the same period in 2012. Drilling activities from all
projects totaled approximately 117,400 metres for the quarter.

In light of IAMGOLD`s $100 million cost reduction initiative, we have
re-prioritized our global exploration activities and lowered our 2013
outlook by $40 million. The reduction in exploration activities relates
to greenfield projects ($14.9 million), brownfield projects ($18.6
million) and the Côté Gold project ($6.5 million). The reduction in
Côté Gold spending reflects the deferral of some exploration costs into
future years, as well as a redesign of some study components. The
changes are not anticipated to impact the timing of the project.
Nevertheless, we plan to undertake significant greenfield exploration
campaigns on priority projects in Ontario, Brazil and Senegal, and
largely maintain planned resource development drilling programs at the
Rosebel, Essakane, Westwood and Niobec operations. The outlook for 2013
exploration expenditures of $99.0 million is $48.2 million lower than
2012 full year exploration spend.

2013 OUTLOOK

PRODUCTION AND CASH COSTS - Guidance maintained for 2013

IAMGOLD Full Year Guidance

2013

Rosebel (000s oz)

365 - 385

Essakane (000s oz)

255 - 275

Doyon division (000s oz)1

130 - 150

Total owner-operated production (000s oz)

750 - 810

Joint ventures (000s oz)

125 - 140

Total attributable production (000s oz)

875 - 950

Owner-operated total cash cost ($/oz)2

$810 - $880

Consolidated total cash cost ($/oz)2

$850 - $925

Owner-operated all-in sustaining cost ($/oz)3

$1,150 - $1,250

Consolidated total all-in sustaining cost ($/oz)3

$1,200 - $1,300

Niobec production (millions of kg Nb)

4.7 - 5.1

Niobec operating margin ($/kg Nb)2

$15 - $17

Effective tax rate (%)

38%

1

Doyon division production of 130,000 - 150,000 ounces includes Westwood
non-commercial production of 40,000 to 50,000 ounces. Associated
contribution will be recorded against its mining assets in the
consolidated balance sheet.

2

Cash cost per ounce and operating margin per kilogram of niobium sold at
the Niobec mine are non-GAAP measures. Refer to the Non-GAAP
performance measures section of this news release for reconciliation to
GAAP measures.

3

All-in sustaining cost per ounce sold is defined as the sum of operating
gold sites attributable cost of sales excluding depreciation and
including by-product credits, corporate general and administration
expenses, sustaining exploration spending, sustaining capital
expenditures and asset retirement obligation costs divided by
attributable ounces sold. The Company plans to conform to the World
Gold Council industry guidelines.

IAMGOLD maintains its 2013 annual gold production guidance range of
875,000 to 950,000 ounces. Production is expected to trend higher in
the second quarter with the processing of Mouska stockpiled ore and is
expected to end the year within guidance. Cash cost guidance for 2013
is maintained at a range of $850 to $925 an ounce. Cash costs for the
remainder of the year are expected to trend higher, mainly due to
increasing hard rock at Rosebel and Essakane. At the same time, we are
achieving traction with our cost improvement program.

We expect to produce between 4.7 and 5.1 million kilograms of niobium in
2013 at a margin of between $15 and $17 a kilogram.

Effective Tax Rate
The effective tax rate for the first quarter 2013 was 68% due to the
limited tax deductibility on the impairment of investments. After
normalizing earnings for the impairment and other items, the effective
tax rate was 36% in the first quarter 2013 and is comparable to the
annual effective tax rate of 38% previously provided as guidance.

Income tax paid was $14.3 million in the first quarter 2013. As in the
prior year, income tax paid will be highest in the second quarter 2013
as final payments for the 2012 income tax liabilities and installments
for the estimated income tax liabilities for 2013 will be made. For the
second quarter 2013, income tax paid is expected to be in the range of
$50 million to $60 million, excluding Sadiola and Yatela, which are
accounted for as equity investments.

CAPITAL EXPENDITURES
The Company maintains its capital expenditure forecast for 2013 as set
out below.

($ millions)

Sustaining

Development/Expansion

Total

Gold segments

Rosebel

$

108.0

$

22.01

$

130.0

Essakane

100.0

200.0

300.0

Westwood

20.0

80.0

100.0

Total gold segments

228.0

302.0

530.0

Niobec

31.0

49.0

80.0

Corporate and other

5.0

-

5.0

Total capital expenditures, consolidated

264.0

351.0

615.0

Joint ventures - Sadiola2 and Yatela

20.0

30.0

50.0

$

284.0

$

381.0

$

665.0

1

The Company is pursuing further discussions with the Government of
Suriname to reduce power rates applicable to its existing concession.
The feasibility study and associated capital program, if any, will not
be finalized until the power rate is determined.

2

Attributable capital expenditures of $50 million include capitalized
stripping costs and existing commitments related to the ordering of
long lead items in 2012 for the Sadiola sulphide expansion project.

As disclosed in IAMGOLD`s annual MD&A, depreciation expense is expected
to increase in 2013 compared to 2012 with the commencement of
commercial production at the Westwood mine and higher depreciation of
capitalized stripping at Essakane. Depreciation is expected to be in
the range of $175 million to $185 million, excluding Sadiola and
Yatela, which are accounted for as equity investments.

The outlook is based on 2013 full year assumptions for average realized
gold price of $1,600 per ounce, $C/$US exchange rate of 1.00, $US/€
exchange rate of 1.25 and average crude oil price of $95 per barrel.

NON-GAAP FINANCIAL MEASURES - ADJUSTED NET EARNINGS

Adjusted net earnings attributable to equity holders of IAMGOLD and
adjusted net earnings attributable to equity holders of IAMGOLD per
share are non-GAAP performance. Management believes that these
measures better reflect the Company's performance for the current
period and are a better indication of its expected performance in
future periods. Adjusted net earnings attributable to equity holders
of IAMGOLD and adjusted net earnings attributable to equity holders of
IAMGOLD per share are intended to provide additional information, but
do not have any standardized meaning prescribed by IFRS, are unlikely
to be comparable to similar measures presented by other issuers, and
should not be considered in isolation or a substitute for measures of
performance prepared in accordance with IFRS. Adjusted net earnings
attributable to equity holders of IAMGOLD represent net earnings
attributable to equity holders excluding certain impacts, net of tax,
such as changes in estimates of asset retirement obligations at closed
sites, unrealized derivative gains or losses, gains or losses on sale
of marketable securities and assets, interest expensed that is
unrelated to financing working capital, impairments of investments in
associates and marketable securities, foreign exchange gains or losses
and the impact of significant changes in tax laws for mining taxes.
These measures are not necessarily indicative of net earnings or cash
flows as determined under IFRS.

The following table provides a reconciliation of net earnings
attributable to equity holders of IAMGOLD as per the consolidated
interim statements of earnings, to adjusted net earnings attributable
to equity holders of IAMGOLD.

The Company makes reference to a non-GAAP measure for operating cash
flow before changes in working capital and operating cash flow before
changes in working capital per share. This measure is defined as cash
generated excluding changes in working capital. Working capital can be
volatile due to numerous factors including build-up of inventories.
Management believes that, by excluding these items, this non-GAAP
measure provides investors with the ability to better evaluate the cash
flow performance of the Company.

The following table provides a reconciliation of operating cash flow
before changes in working capital:

Basic operating cash flow before changes in working capital per share
($/share)

$

0.31

$

0.48

1

Balances related to 2012 have been reclassified as per note 2(c)(ii) of
the consolidated interim financial statements.

NON-GAAP FINANCIAL MEASURES - GOLD MARGIN

This news release refers to gold margin per ounce of gold, a non-GAAP
performance measure, in order to provide investors with information
about the measure used by management to monitor the performance of its
gold assets. The information allows management to assess how well the
gold mines are performing relative to the plan and to prior periods, as
well as assess the overall effectiveness and efficiency of gold
operations.

In periods of volatile gold prices, profitability changes with altering
cut-off gold grades. Such a decision to alter the cut-off gold grade
will typically result in a change to total cash costs per ounce, but it
is equally important to recognize that gold margins also change at an
equal or even faster rate. While mining lower grade ore results in
less gold being processed in any given period, over the long-run it
allows the Company to optimize the production of profitable gold,
thereby maximizing the Company's total financial returns over the life
of the mine. IAMGOLD's exploitation strategy, including managing
cutoff grades, mine sequencing, and stockpiling practices, is designed
to maximize the total value of the asset given conservatively derived
assumptions for key economic parameters going forward. At the same
time, the site operating teams seek to achieve the best performance in
terms of cost per tonne mined, cost per tonne processed and overheads.

The gold margin per ounce of gold does not have any standardized meaning
prescribed by IFRS, is unlikely to be comparable to similar measures
presented by other issuers, and should not be considered in isolation
or a substitute for measures of performance prepared in accordance with
IFRS.

The following table provides a reconciliation of gold margin per ounce
of gold for the gold operating mine to realized gold price less total
cash costs per ounce produced.

Three months ended
March 31,

($/oz of gold)

2013

2012

Realized gold price

$

1,631

$

1,702

Total cash costs

787

679

Gold margin

$

844

$

1,023

NON-GAAP FINANCIAL MEASURES - CASH COSTS

This news release often refers to cash costs per ounce, a non-GAAP
performance measure in order to provide investors with information
about the measure used by management to monitor performance. This
information is used to assess how well the producing gold mines are
performing compared to plan and prior periods, and also to assess the
overall effectiveness and efficiency of gold mining operations. "Cash
cost" figures are calculated in accordance with a standard developed by
The Gold Institute, which was a worldwide association of suppliers of
gold and gold products and included leading North American gold
producers. The Gold Institute ceased operations in 2002, but the
standard is still an accepted standard of reporting cash costs of gold
production in North America. Adoption of the standard is voluntary and
the cost measures presented herein may not be comparable to other
similarly titled measures of other companies. Costs include mine site
operating costs such as mining, processing, administration, royalties,
production taxes, and attributable realized derivative gain or loss,
but are exclusive of amortization, reclamation, capital, exploration
and development costs. These costs are then divided by the Company's
attributable ounces of gold produced to arrive at the total cash costs
per ounce. The measure, along with sales, is considered a key
indicator of a company's ability to generate operating earnings and
cash flow from its mining operations.

These gold cash costs do not have any standardized meaning prescribed by
IFRS and differ from measures determined in accordance with IFRS. They
are intended to provide additional information and should not be
considered in isolation or as a substitute for measures of performance
prepared in accordance with IFRS. These measures are not necessarily
indicative of net earnings or cash flow from operations as determined
under IFRS. The following tables provide a reconciliation of total cash
costs per ounce produced for gold mines to the cost of sales, excluding
depreciation, as per the consolidated interim statements of earnings.

This news release refers to operating margin per kilogram of niobium at
the Niobec mine, a non-GAAP performance measure, in order to provide
investors with information about the measure used by management to
monitor the performance of its non-gold asset, the Niobec mine. The
information allows management to assess how well the Niobec mine is
performing relative to the plan and to prior periods, as well as,
assess the overall effectiveness and efficiency of the operations. The
operating margin per kilogram of niobium does not have any standardized
meaning prescribed by IFRS, are unlikely to be comparable to similar
measures presented by other issuers, and should not be considered in
isolation or a substitute for measures of performance prepared in
accordance with IFRS.

The following table provides a reconciliation of operating margin per
kilogram of niobium at the Niobec mine to revenues and cost of sales as
per the consolidated interim statements of earnings.

($ millions, except where noted)

Three months ended
March 31,

2013

2012

Revenues from the Niobec mine as per segmented information1

$

49.7

$

48.4

Cost of sales from the Niobec mine as per segmented information,
excluding
depreciation expenses

(30.1)

(29.8)

Other costs

-

(0.2)

Operating margin

$

19.6

$

18.4

Sales volume (millions of kg Nb)

1.2

1.2

Operating margin ($/kg Nb)

$

16

$

16

1

As per the Company's consolidated interim financial statements.

End Notes (excluding tables)

(1)

Adjusted net earnings attributable to equity holders of IAMGOLD,
adjusted net earnings attributable to equity holders of IAMGOLD per
share, operating cash flow from continuing operations before changes in
working capital and operating cash flow from continuing operations
before changes in working capital per share are non-GAAP financial
measures. Please refer to the reconciliation to GAAP measures above in
this news release.

(2)

Cash cost per ounce, gold margin per ounce, operating margin per
kilogram of niobium at the Niobec mine are non-GAAP measures. Please
refer to the Supplemental Information section attached to this news
release for reconciliation to GAAP measures.

(3)

The DART rate refers to the number of days away, restricted duty or job
transfer incidents that occur per 100 employees.

Filing of Amended New By‐Law Number Two
IAMGOLD announces that, following discussions with Institutional
Shareholder Services ("ISS") regarding the advanced notice provisions
in the new By‐Law Number Two of the Corporation which has been filed on
SEDAR and EDGAR and is subject to the approval of IAMGOLD's
shareholders at the upcoming annual and special meeting of shareholders
to be held on May 21, 2013, IAMGOLD has amended these provisions to
meet ISS's standards. The amended new By‐Law Number Two has been filed
on SEDAR (www.sedar.com) and EDGAR (www.sec.gov) and available on IAMGOLD's website (www.iamgold.com). Shareholders can also request a copy from IAMGOLD's Corporate
Secretary.

CONFERENCE CALL
A conference call will be held on Wednesday, May 8, 2013 at 8:30 a.m.
(Eastern Standard Time) for a discussion with management regarding
IAMGOLD`s first quarter 2013 operating performance and financial
results. A webcast of the conference call will be available through
IAMGOLD`s website - www.iamgold.com.

A replay of this conference call will be available from 5:00 p.m. May
8th to June 6th, 2013. Access this replay by dialling: North America
toll-free: 1-855-410-0556 or 1-646-583-7395, passcode: 337468#.

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION
Certain information included in this news release, including any
information as to the Company's future financial or operating
performance, and other statements that express management's
expectations or estimates of future performance, other than statements
of historical fact, constitute forward-looking statements.
Forward-looking statements are provided for the purpose of providing
information about management's current expectations and plans relating
to the future. Forward-looking statements are generally identifiable by
use of the words "may", "will", "should", "continue", "expect",
"anticipate", "estimate", "believe", "intend", "plan" or "project" or
the negative of these words or other variations on these words or
comparable terminology. Forward-looking statements are necessarily
based upon a number of estimates and assumptions that, while considered
reasonable by management, are inherently subject to significant
business, economic and competitive uncertainties and contingencies. The
Company cautions the reader that reliance on such forward-looking
statements involve risks, uncertainties and other factors that may
cause the actual financial results, performance or achievements of
IAMGOLD to be materially different from the Company's estimated future
results, performance or achievements expressed or implied by those
forward-looking statements, and the forward-looking statements are not
guarantees of future performance. These risks, uncertainties and other
factors include, but are not limited to, changes in the global prices
for gold, niobium, copper, silver or certain other commodities (such as
diesel, aluminum and electricity); changes in U.S. dollar and other
currency exchange rates, interest rates or gold lease rates; risks
arising from holding derivative instruments; the level of liquidity and
capital resources; access to capital markets, and financing; mining tax
regimes; ability to successfully integrate acquired assets;
legislative, political or economic developments in the jurisdictions in
which the Company carries on business; operating or technical
difficulties in connection with mining or development activities; laws
and regulations governing the protection of the environment; employee
relations; availability and increasing costs associated with mining
inputs and labour; the speculative nature of exploration and
development, including the risks of diminishing quantities or grades of
reserves; adverse changes in the Company's credit rating; contests over
title to properties, particularly title to undeveloped properties; and
the risks involved in the exploration, development and mining business.
With respect to development projects, IAMGOLD's ability to sustain or
increase its present levels of gold production is dependent in part on
the success of its projects. Risks and unknowns inherent in all
projects include the inaccuracy of estimated reserves and resources,
metallurgical recoveries, capital and operating costs of such projects,
and the future prices for the relevant minerals. Development projects
have no operating history upon which to base estimates of future cash
flows. The capital expenditures and time required to develop new mines
or other projects are considerable, and changes in costs or
construction schedules can affect project economics. Actual costs and
economic returns may differ materially from IAMGOLD's estimates or
IAMGOLD could fail to obtain the governmental approvals necessary for
the operation of a project; in either case, the project may not
proceed, either on its original timing or at all.

For a more comprehensive discussion of the risks faced by the Company,
and which may cause the actual financial results, performance or
achievements of IAMGOLD to be materially different from the company's
estimated future results, performance or achievements expressed or
implied by forward-looking information or forward-looking statements,
please refer to the Company's latest Annual Information Form, filed
with Canadian securities regulatory authorities at www.sedar.com, and filed under Form 40-F with the United States Securities Exchange
Commission at www.sec.gov/edgar.html. The risks described in the Annual Information Form (filed and viewable
on www.sedar.com and www.sec.gov/edgar.html, and available upon request from the Company) are hereby incorporated
by reference into this news release.

The Company disclaims any intention or obligation to update or revise
any forward-looking statements whether as a result of new information,
future events or otherwise except as required by applicable law.

About IAMGOLD

IAMGOLD (www.iamgold.com) is a leading mid-tier gold producer with six operating gold mines
(including current joint ventures) on three continents. In the Canadian
province of Québec, the Company also operates Niobec Inc., one of the
world's top three producers of niobium, and owns a rare earth element
resource close to its niobium mine. IAMGOLD is well positioned for
growth with a strong financial position and extensive management and
operational expertise. To grow from this strong base, IAMGOLD will
advance those projects from its pipeline of exploration and expansion
projects that can deliver attractive rates of return. IAMGOLD's growth
plans are strategically focused in certain regions in Canada, select
countries in South America and Africa.

Please note:

This entire news release may be accessed via fax, e-mail, IAMGOLD's
website at www.iamgold.com and through CNW Group's website at www.newswire.ca. All material information on IAMGOLD can be found at www.sedar.com or at www.sec.gov.

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